Kellogg
School Professor Daniel
Spulber’s eighth
book helps MBA students see the ‘best match’ of
organizational abilities and market opportunities

Many dot-coms that went dot-bomb a few years
ago saw promising market opportunities but did not have
the organizational
capacity to take advantage of them. Many American manufacturers
whose gears have ground to a halt recently have an abundance
of talent but lack a clear sense of where their markets
lie.

So says Kellogg School Professor Daniel
Spulber, author of the new textbook Management Strategy (McGraw
Hill, 2003), which gives MBA students a five-step approach
for formulating
successful corporate strategy. A key to that success,
Spulber says, is analyzing a firm’s internal
and external context.

“
There’s some debate in management strategy about
whether we’re guided by markets or organizational
abilities,” says Spulber, who sees that debate as
nonproductive. Ideally, he says, “the manager chooses
the best combination of organizational abilities and market
opportunities — what I call in the book, ‘the
best match.’”

Management Strategy is packed with vignettes
about companies who have made this match well and not
so well. Spulber,
who teaches International Business Strategy and
has a distinctly global focus, puts the Mexican
construction
materials firm
Cemex high on his list of successes. “They’ve
been very successful at matching their organizational skills,
in this case in trading and in manufacturing, with marketing
opportunities all around the world,” he
says.

The first step in Spulber’s approach
is to set goals. “There’s
a lot of confusion about what goals are. This
book tells you how to go through the process of goal selection,” he
says. Having done that, the manager should
perform an external analysis that examines
customers, suppliers,
competitors
and partners as well as an internal analysis
that looks at structure, performance, abilities
and resources,
he
believes.

The manager should next
figure out how the company can create competitive advantage,
including the
traditional aims of cost and differentiation
advantage along
with a third type for which Spulber coined
the term transaction
advantage. “That’s where the company lowers
transaction costs,” he says. “These companies
learn how to make money by saving you time, whether it’s
a superstore or a convenient retail experience.”

While the concept “time is money” may be as
old as markets themselves, the search for transaction advantage
has intensified considerably in recent years, especially
given online transactions, Spulber says. He points to eBay
as perhaps the iconic example of that phenomenon. “They’ve
built a gigantic business just on providing convenience
in transactions. That’s a critical example,” he
says, “but the principle is not confined to the Internet.
It’s any company that draws you in by sheer convenience.”

Spulber’s text also outlines a method for formulating
competitive strategy and reshaping the organizational structure
accordingly. “To be an effective leader, you have
to be able to set a direction and bring others along with
you,” he says. “People can have a wealth of
tools, but they may not be able to sit down with a blank
piece of paper and say, ‘All right. How do I start?’”

Management Strategy is the eighth book
and second textbook for Spulber,
a Kellogg School
professor
since 1990
and founding chair of the Kellogg
International Business and
Markets Program.

“
It’s the culmination of my career, inspired the most
by my time here at Kellogg,” he says. “It also
reflects Dean [Dipak] Jain’s exhortation
to faculty to write more textbooks.”

“ We talk generally about communicating what we discover,
making it accessible. Textbooks are an
important part of that.”

About Professor Spulber
Prof. Spulber is an economist and expert in international
business. He is also a professor of law and director
of the Kellogg School International Business and Markets
Program,
and founding editor of the Journal of Economics & Management
Strategy.

Prof. Spulber’s research includes
the areas of industrial organization, microeconomic theory,
management
strategy,
regulation and energy economics. His numerous articles
have been published in such journals as the American
Economic Review, Quarterly Journal of Economics, Journal
of Economic
Theory, Rand Journal of Economics, International Economic
Review and the Harvard Journal on Law and Public Policy.